Big Sideways Correction On EURUSD Completed; More Weakness Is Here

EURUSD is turning sharply lower from the 1.1300 level where pair have finally accomplished a big and very long sideways pattern that was located in wave IV. It was a triangle which is now completed because of a decisive break beneath the blue wave D swing at 1.0847 level three weeks ago. As such we are now even more confident that bears may gain more momentum and at the start of a new week, make a decisive breach below blue wave B.

At the updated chart we can see waves 1 and 2 completed, and if that is the case then more weakness may follow in weeks ahead into wave 3.

EURUSD Daily Chart

EURUSD is in a strong bear trend for the last three weeks which is looking impulsive on the 4h chart, so we believe that big consolidation since 2015 was a triangle in wave IV, now completed at 1.1300. As such, we are looking lower into wave V which has completed its first impulsive wave as wave 1-circled, followed by a three wave A)-B)-C) correction that seems completed at 1.0876 level, labeled as wave 2.

As we can see price made a nice drop towards the 1.0524 area, from where pair quickly made an overnight bounce, indicating that minor wave 1) could be over and corrective wave 2) may be in motion, with resistance seen around the previous wave B swing at 1.0704.

EURUSD 4 Hour Chart

A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.